Business Owner’s Policy:
Understanding BOP Insurance

A business owner’s policy is not a single type of coverage. Instead, it’s a bundle that includes both general liability and commercial property insurance, while offering a discount on pricing to help businesses save money. 

This type of insurance offers robust protection in the areas business owners need it most but does so for less. If you have a business location, employ people, have assets that could be damaged or stolen, deal with private customer data, or have a risk of experiencing a lawsuit, a BPO policy is an important investment.

What is a business owner’s policy?

A business owner’s policy, often called BOP insurance, is exactly what it sounds like – insurance designed specifically for business owners. It combines business property and liability insurance into a single policy. 

a smiling business owner

A business owner’s policy ensures that your business is protected from physical threats like fire, but also from theft, and even claims that stem from business operations, such as property damage or bodily injury. Most policies will also protect you against claims related to advertising injury. 

It’s important to remember a couple of things here. First, every business has different needs. BPO insurance provides the same basic coverage, but you’ll want to customize it to match your risk profile and then scale it over time as your business grows. The right insurer is critical here. Make sure you’re working with an insurance company that has the flexibility necessary for this.

Second, realize that not all insurance companies offer the same type of base coverage in their business owner’s policies. Carefully compare your options to ensure you’re getting the right amount of coverage in key areas where you need the protection.

Who is eligible for a business owner’s policy?

Unsure if you qualify for a business owner’s policy? These insurance policies tend to come with specific requirements. For instance, your business must employ fewer than 100 people and it must be within a relatively low-risk industry. You must own or lease a small commercial space and bring in under $5 million in annual revenue.

Who is not eligible for a business owner’s policy?

Businesses with more than 100 employees or more than $5 million in annual earnings likely won’t qualify for BOP insurance. Likewise, businesses within higher-risk industries often don’t qualify, such as restaurants. Businesses with no commercial space (home-based businesses) or those with large commercial spaces don’t usually qualify, either.

How much does a business owner’s policy cost?

Calculating workers' comp policy cost

The average cost of a business owner’s policy is just under $270 per month. However, Kickstand’s customers pay substantially less for their insurance coverage. 

There’s also no one-size-fits-all price here. Each policy is issued based on a combination of unique factors that pertain directly to your specific business. 

These include things like the amount of coverage you need, the number of employees you have, where your business is located, your industry, specific business operations carried out on the property, and the value of your business property to name just a few.

What does a business owner’s policy typically protect against?

Every BOP insurance policy should be customized to your unique needs, requirements, and risk profile. However, some of the most common coverages include the following:

Business Property Damage

Business Property Damage

Damage to your business property is a nightmare. Many real-world threats exist, too. Fire, storm damage, theft, and more can leave you wondering where to turn. Your BOP insurance policy will usually cover this type of damage. Business personal property coverage (BPP) usually kicks in to cover things like machinery or equipment necessary to operate the business.

Third-Party Bodily Injury

Third-Party Bodily Injury

Because your BOP policy includes both general liability and commercial property insurance, it will cover medical and legal expenses related to a customer being injured while on your property. Note that it will not cover an employee’s injuries. That’s a job for your worker’s compensation insurance.

Third-Party Property Damage

Third-Party Property Damage

What happens if a customer enters your store, catches their arm on a protruding shelf, and drops their cell phone to the floor, where it smashes? Without BOP insurance, you are on the hook for those costs. If you have a business owner’s policy, though, it will pay for third-party property damage like this.

Advertising Injury

Advertising Injury

What happens if you find your business sued for copyright infringement? Where do you turn if you’re being sued for slander? Your business owner’s policy protects the business against these types of suits (general liability).

Business Income

Business Income

What happens if your business is forced to close for a period due to a disaster like a fire or a storm? How will you pay your employees? Most of the time, your business owner’s policy will provide business income protection so that you can continue to pay your people while the business is closed.

What are some common business owner’s policy exclusions?

Just as there are common inclusions for a business owner’s policy, there are also common exclusions. Most of the time, your BOP insurance will not cover the following:

  1. Damaged Payment Records – Most businesses need customer records to collect payments. However, what happens if those records are destroyed during a disaster, such as a fire? Your BOP insurance won’t cover this in most instances, although you can add an endorsement so that it does (more on that in the next section).
  2. Employee Injuries – As mentioned in the previous section, your business owner’s policy only covers third-party injuries. If you or an employee are injured, worker’s compensation insurance is what kicks in and provides coverage. Most states require businesses with more than a certain number of employees to carry worker’s compensation insurance, too.
  3. Business Vehicles – If your business operates vehicles, or you drive a personal vehicle for business purposes, you’ll need commercial auto insurance. Your BOP insurance will not cover your vehicles.
  4. Harassment, Discrimination, and Wrongful Termination –If you’re facing a lawsuit related to wrongful termination, harassment, or discrimination in the workplace, you’ll need employment practices liability insurance.

What other types of coverage can be added to a BOP?

As you can see from the previous section, a business owner’s policy can offer a lot of protection, but it doesn’t safeguard your business against all threats. The good news is that you can add more protection in the form of additional endorsements and optional coverages, including the following:

Cyber Liability

With the risk of data breaches and malicious software attacks rising daily, no business should be without cyber liability insurance. This protects your business in the event of an attack or breach, including expenses related to customer notification and legal fees, but also financial losses due to cyberattacks.

Accounts Receivable

Accounts receivable coverage is important to ensure that you’re able to continue collecting what’s due to you from customers even if your original records are lost, damaged, or destroyed during a disaster.

Product Liability Coverage

Customer injuries don’t only happen on your business property. They can also occur as the result of using your product(s) away from the property. Product liability coverage helps protect your business from lawsuits stemming from these types of injuries.

Employment Practices Liability Insurance

Try as you might, you can never guarantee that harassment, discrimination, or wrongful termination will not occur within your business. And if they do, you’ll need employment practices liability insurance to protect you from the repercussions.

Commercial Auto Insurance

While you can certainly take out a separate commercial auto insurance policy to cover your business vehicles, you can also usually add it to your business owner’s policy with most insurers. This may help you reduce your insurance costs while getting the protection that you need.

Rented Vehicle Coverage

Your commercial auto protection needs don’t stop with owned vehicles or personal vehicles used for business purposes. Rented vehicle coverage ensures that whatever vehicle you’re using, from a rental car at a distant airport to a moving van is covered in the event of an accident. This type of coverage is often more affordable than buying insurance from a rental company, too.

Ready to explore the possibilities with your own business owner’s policy?

Get in touch with us. Just complete our brief online form and you’ll receive a no-obligation quote.

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Business owner’s policy vs. general liability

To run a successful business, you’ll need insurance protection. Most business owners opt for general liability to protect their businesses from a wide range of threats, like property damage and third-party bodily injury. 

A business owner’s policy combines your general liability insurance policy with commercial property insurance, giving you the protection of both for less than what you’d spend if you took out separate policies. 

So, yes, you can take out a general liability policy by itself, but if you qualify for BOP insurance, we highly recommend going that route to save money, time, and hassle.

Business owner’s policy vs. commercial package policy

Weighing the decision between a commercial package policy and BOP insurance? It’s an important decision and understanding the differences here can help. A business owner’s policy always includes the same types of coverage (with some variations based on what specific insurers offer and any optional coverages you choose). 

In contrast, a commercial package policy is customized from the ground up for your specific requirements. These policies also don’t come with the same eligibility requirements that BOP insurance policies do, which means they’re better suited for those in higher-risk industries, home-based businesses, or businesses that employ more than 100 people. 

If you’re not eligible for a BOP insurance policy, or you want to completely customize your coverage, then a commercial package policy may be right for you. Otherwise, opt for BOP insurance.

Do business owners’ policies pay for employee theft?

Your BPO policy will usually cover loss due to third-party theft (shoplifters, for instance), but it may not cover employee theft. In most cases, theft coverage is an optional add-on, and you’ll need to ask your insurer about it. 

Most of the time, you’ll need crime insurance to protect against employee theft and fraud. Even then, this policy does not protect against fraud committed by managers, partners, or owners.

Does a business owner’s policy cover commercial property? 

Yes, your BPO policy should include commercial property coverage. 

What does that mean, though? Commercial property coverage protects you against loss or damage to the physical location where you do business, as well as the equipment within it. It also covers these items whether you own the location or lease it from another party.

Does a business owner’s policy negate the need for worker’s compensation insurance?

No, your BPO policy does not take the place of worker’s compensation insurance. Most businesses must carry worker’s comp coverage in addition to other types of insurance. However, these laws vary from state to state and even industry to industry

Specific businesses may not be required to carry it at all if they have no employees beyond the owner, but even in these cases, purchasing a policy is a smart decision that can pay off in the future.

How long does it take to get proof of insurance when purchasing a BPO policy?

With a traditional insurance company, it can take weeks to receive your certificate of insurance (COI). However, with Kickstand, we can usually provide you with proof of liability coverage the same day. If you need immediate proof of insurance to sign a contract or to move forward with a time-sensitive project, contact us today to get started.

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